12

Entrepreneurship
4 M’s of Production
and
Business Model
 What I Need to Know

In developing a business plan we also have to consider the importance of the

4M’s of operations in all business opportunities. Because it helps you to identify the
problems of the business in the future and in actual situation especially in the
production process and marketing.
In application of your 4M’s of production, it is best to consider the customer’s
point of view in terms of their influences as to why they will buy a particular product,
does your product aim to answer each consumer’s wants or needs and meet up with
their expectations over the product, and how do suppliers, value chain and supply
chain affects the business and production.
This module will guide you to demonstrate understanding of the 4M’s of
operations and for you to be able to:

 Describe the 4M’s (Manpower, Method, Machine, Materials) of operations in

relation to the business opportunity;
 Develop a product description;
 Create a prototype of the product;
 Test the product prototype;
 Lesson 4 M’s of Operations in Relation to
the Business Opportunity and
1
Developing Business Model

What’s In

In your previous lesson, you learned about the 7P’s of Marketing Mix;
Product, Place, Price, Promotion, People, Packaging and Positioning in relation to
business opportunity, wherein marketing is about creating and accumulating
customers. Marketing plans are intended to capture a market portion and to setback
competitors.
Brand name was also introduced, where it is a name, symbol, or other
feature that distinguishes a seller’s goods or services in the marketplace. Your brand
is one of the greatest assets because your brand is your customers’ over-all
experience of your business.
Experts believed that a good brand can result in better loyalty for its
customers, a better corporate image and a more relevant identity.
 What’s New

GUESS THE PICTURE

Direction: Given with the following pictures, fill in the following blanks below to form a
meaningful word. Two (2) points for each correct word.

M P W R M H N S

M T I S M H S
 What is It

The most serious issues in the whole production system are the inputs and the
transformation process. Their quality determines the quality of the output.
The factors involved in the input and the production process are usually
referred to as the Four M’s of production, namely Manpower, Method, Machine, and
Materials.

Four M’s

 Manpower
 Method OUTPUT
 Machine
 Materials

Manpower
- Talks about human labor force involved in the manufacture of products.
- It is measured as the most serious and main factor of production. The
entrepreneur must determine, attain and match the most competent and
skilled employees with the jobs at the most appropriate time period.
- Educational qualifications and experience, status of employment, numbers of
workers required, skills and expertise required for the job are some of the
manpower criteria that must be highly considered by the entrepreneur.
Material
- Talks about raw materials necessary in the production of a product. Materials
mainly form part of the finished product. Just in case the resources are below
standard, the finished product will be of unsatisfactory as well.
- The entrepreneur may consider cost, quality, availability, credibility of
suppliers and waste that the raw material may produce.
Machine
- Discusses about manufacturing equipment used in the production of goods or
delivery of services.
 - In the process of selecting the type of equipment to purchase, the
entrepreneur may consider types of products to be produced, production
system to be adopted, cost of the equipment, capacity of the equipment,
availability of spare parts in the local market, efficiency of the equipment and
the skills required in running the equipment.
Method
- Production method discusses the process or way of transforming raw
materials to finished products. The resources undergoes some stages before
it is finalized and becomes set for delivery to the target buyers.
- The selection of the method of production is dependent on product to
produce, mode of production, manufacturing equipment to use and required
skills to do the work.
Product Description
- Is the promotion that explains what a product is and why it’s worth buying?
The purpose of a product description is to provide customers with details
around the features and benefits of the product so they’re obliged to buy.
- Know who your target market is, focus on the product benefits, tell the full
story, use natural language and tone, use power words that sell, and use
good images. These are guidelines for you to have a good product
description; since some customers are very particular with it since they
consider the welfare of their family, if it is safe to use.
Prototyping
A duplication of a product as it will be produced, which may contain such
details as color, graphics, packaging and directions. One of the important early steps
in the inventing process is making a prototype. Benefits are the reasons why
customers will decide to buy the products such as affordability, efficiency or ease of
use. The features of the product or service merely provide a descriptive fact about
the product or service. It is better to test your product prototype to meet
customers’ needs and expectations; and for your product to be known and
saleable. Pretesting of the product or service is similar to a sample of the product or
service given to the consumer free
of cost in order that he/she may try the product before committing to a purchase.
Supplier
An entity that offers goods and services to another business. This entity is
among of supply chain of a business, which may offer the main part of the value
contained within its products. Certain suppliers may even involve in drop shipping,
where they ship goods directly to the customers of the buyer.
Suppliers are your business partners, without them your business will not
live. You need them as much as you need your customers to be satisfied. But as an
entrepreneur you have to choose a potential supplier that has loyalty and value your
partnership; a supplier that would lead you to the fulfillment of your business
objectives, mission and vision.
Value chain is a method or activities by which a company adds value to an
item, with production, marketing, and the provision of after-sales service. The main
goal and benefit of a value chain, and therefore value chain analysis, is to make or
support a competitive benefit.
A supply chain is a structure of organizations, people, activities, data, and
resources involved in moving a product or service from supplier to customer.
The main objective of supply chain management includes management of a
varied range of components and procedures, for instance, storing of raw materials,
handling the inventory, warehousing, and movement of finished product from the
point of processing to the point of consumption.
 Business model describes the reasons of how an organization creates, delivers,
and captures value in economic, social, cultural or other contexts. The development
of business model construction and variation is also called business model
innovation and forms a part of business plan.

It is a company's plan for how it will make revenues and make a profit. It
describes what products or services the business plans to manufacture and market,
and how it plans to do so, as well as what expenses it will incur.

There are important phases in developing your business model, namely;

Identifying the specific audience; establishing business process; recording a
business resources; developing strong value proposition; determining key business
partners; and creating a demand for today’s generation strategy and be open for
innovations.

After developing a business model, we will proceed in developing a business

plan. To be able to successfully complete this module, you need to prepare a
business plan and operate your plan and finally keep records of your business
transactions.

Business plan is an important tool for you to have an idea about the future of
your business. Your business plan will be your guide in the moment you will be
implementing and operating your business proposal.

You can also make use of the business plan in securing investment capital
from financial institutions or lenders. It can also be used to influence people to work
for your enterprise, to secure credit from suppliers, and to fascinate potential
customers.
 Read the stories of Jessie, Mercy and Monna below to fully understand the
importance of having a business plan:

“Jessie is the eldest of five children of Mr. & Mrs. Natividad. The family is
having difficulty to support for their everyday needs. Because of this, Jessie tried to
enter selling banana cue and with his dream to make his business grow, he put up
many stalls in the community without considering the advises of his friends to make
a business plan before implementing his decision. After a few months his stalls
shutdown.”
“Mercy is the youngest in the family. She found out that she loves to cut hair
and apply make up to her friends. Until such time that her friends introduced her to
their friends too for haircut and make up when there are occasions. Few months
after, Mercy was told by her friends to put up a beauty parlor in their place. So she
asks her mother who is also a businesswoman to teach her how to make a business
plan and eventually ended with a successful business.”
“Monna is a diligent student. Because of her knowledge gained from school
about business plan she was able to enhance her skills in business and finally found
herself into his laundry shop business.”

Each scenario taught us that business is not just about how much income or
profit you can get but it’s about the life of your business. And in having a business,
you also have to consider technological forces, Social forces, Political forces,
Cultural forces, Economic forces and Legal forces.

The following are the components found in a Business Plan.

 Introduction- this part discusses what is the business plan all about.
 Executive Summary- is part of the business plan which is the first to be
presented but the last to be made.
 Management Section- shows how you will manage your business and the
people you need to help you in your operations.
 Marketing Section- shows the design of your product/service; pricing, where
you will sell and how you will introduce your product/service to your market.
  Financial Section- shows the money needed for the business, how much you
will take in and how much you will pay out.
 Production Section- shows the area, equipment and materials needed for
the business.
 Competitive Analysis- is the strategy where you identify major competitors
and research their products, sales and marketing strategies.
 Market- The persons who will buy the product or services
 Organizational chart- is the diagram showing graphically the relation of one
official to another, or others of a company.

What’s More

General Directions: Answer the following questions based on your learnings about
4M’s of production and Value Chain or Supply Chain. Write your answer on the
space provided. Five (5) points in each correct answer for Problem No.1 and 2
points for each correct answer in Problem No.2.

Problem No. 1. “In your home, when you want to eat egg sandwich before going to
school, your mother would surely prepare it for you. Your egg sandwich would not be
produced without a process.”

1. Who would be your manpower?

2. What would be your materials?
3. What machines or tools would you use?
4. What methods are needed to produce the egg sandwich?
(Cooking procedures- enumerate them).
Problem No. 2: With the pictures shown below, identify each picture whether it
is Value Chain or Supply Chain.

1.

2.

3.
 What I Have Learned

Complete the statements below and write your answers on the space provided.

1. talks about human labor force involved in the manufacture of

products. It is measured as the most serious and main factor of production.
2. is about raw materials necessary in the production of a
product.
3. discusses the process or way of transforming raw materials
to finished products.
4. The purpose of a is to provide customers with
details around the features and benefits of the product so they’re obliged to
buy.
5. A duplication of a product as it will be produced, which may contain such
details as color, graphics, packaging and directions. One of the necessary
early steps in the inventing method is creating a .
6. are your business partners, without them your business will
not live.
7. describes the reasons of how an organization
creates, delivers, and captures value in economic, social, cultural or other
contexts.
8. is an important tool for you to have an idea about
the future of your business.
9. is part of the business plan which is the first to be
presented but the last to be made.
10. shows the design of your product/service; pricing,
where you will sell and how you will introduce your product/service to your
market.
 What I can Do

Direction: Answer the following questions base on the picture shown below. Write your
answers on the space provided. Two (2) points in each correct answer.

1. Are you familiar with the picture above? Give one example of a food
business establishment that you think is famous among teenagers today.

.
2. What do you think is the reason why this particular food
business establishment becomes famous amongst teens
nowadays?

.
3. Do you know some other ways to enjoy their product other than coming
in personally into their store and buying their product for yourself?

.
4. Do you think such strategies are effective to make the business
more productive? Why or why not?